Bargaintown, D.C., Inc. v. Bellefonte Ins. Co., 54 N.Y.2d 700 (1981)

r
r

When an insurance policy contains a contractual limitations clause that is ambiguous or conflicts with statutory provisions, the court will interpret the clause in favor of the insured, potentially applying a longer statutory period of limitations.

r
r

Summary

r

Bargaintown, D.C., Inc. sued Bellefonte Insurance Company to recover for burglary and water damage under an “all risks” property insurance policy. The policy required actions to be commenced within 12 months unless a longer period was provided by applicable statute. The suit was filed more than one year but less than two years after discovery of the damage. The New York Court of Appeals affirmed the dismissal, holding that the contractual limitation was valid and enforceable, declining to interpret the clause as incorporating the general six-year statute of limitations for contract actions. The dissent argued for applying either the six-year contract statute of limitations or the two-year limitation from the standard fire insurance policy.

r
r

Facts

r

Bargaintown, D.C., Inc. purchased an all-risk insurance policy from Bellefonte Insurance Company covering property in multiple jurisdictions, including New York. The policy stipulated that actions for property loss had to be initiated within 12 months of the insured’s discovery of the loss,